ETHICS AND GOVERNANCE

Ethics And Governance



Ethics And Governance

Developing governance structures to protect input providers is also more complicated when contracts and legal rules cannot be developed easily due to complexity and uncertainty. Contracts and legal rules provide protection only when the situations likely to be encountered can be anticipated and the ways of proceeding in each situation can be specified. Business ethics research centers are organizations dedicated to the study of what is good or right for individuals and groups of individuals engaged in business activity.

Ethics is a form of applied ethics (a branch of philosophy), the work of these centers is concerned with taking theoretical ethical concepts and principles and applying them in the real world. More particularly, ethics research centers investigate and analyze the application of such concepts and principles to business decision making and action and consider the ramifications across the entire range of business functions, including the management of legal compliance, risk, stakeholder relationships, and business reputation, to name just a few. This investigation and analysis usually has the aim of developing greater awareness and understanding of ethical issues in the business environment and promoting best practices to address them. Accordingly, business ethics centers are most effective when they bridge theoretical inquiry and practical application and guide organizations in the development of ethical business cultures. When planning is difficult because of the complexity and uncertainty of the situations that might arise, other means must be found to protect stakeholder interests. Despite the three problems of lock-in, complexity, and uncertainty, governance structures for the assets of each input provider are relatively easy to provide for each corporate constituency except one, namely shareholders, the providers of equity capital.

Many of the major areas of international business ethics are addressed by the Guidelines, including labor relations, human rights, environmental obligations, information disclosure and transparency, the problem of bribing public officials, consumer interests, the business concerns around matters of science and technology, competition and antitrust issues, and taxation by host countries. The Guidelines are divided into three parts. The first section lays out and details the 10 guidelines themselves, and in this first part the business ethics areas mentioned are raised with attention to both general and specific recommendations on how multinational corporations can successfully address the given topic. This section is peppered with a number of “should” statements, that is, a set of 10 normative-type directives to multinational corporations that provide pointed language about their obligations and responsibilities in the global marketplace. More discussion of the provisions found in these 10 planks is provided in the third part of the Guidelines that consists of some extensive commentary and analysis.

The second section of the Guidelines is titled “Implementation Procedures of the OECD Guidelines for Multinational Enterprises.” As the title suggests, the OECD has issued the Guidelines with suggestions to the governments adhering to them about how to apply, oversee, and manage the 10 recommendations. Although the provisions set out by the Guidelines are voluntary and exist without any recourse to legal ...